IDFC Ltd. and India’s Department of Posts are among companies favored for new bank permits that the central bank is poised to issue in coming weeks, a person with direct knowledge of the matter said.
The two companies’ strength was in their existing branch networks, the person said, requesting not to be named as the information is not public. The panel, headed by former Reserve Bank of India Bimal Jalan, submitted a report on the 24 applicants to the central bank on Feb. 25.
The first permits to be issued in more than a decade would allow new banks to tap rural savings and bolster lending in an economy recovering from the slowest pace of growth in a decade. Just 35 percent of India’s adult population have accounts with financial institutions, compared with the global average of 50 percent, according to the World Bank.
L&T Finance Holdings Ltd., Bajaj Finserv Ltd. and Aditya Birla Nuvo Ltd. are among the permit applicants. It’s up to the RBI to make a final decision on the approvals, the person said, without giving a timeframe.
The companies that get a license will be required to start their banks within 18 months and one out of four branches must be located in towns with fewer than 10,000 people, the RBI said in February 2013 when calling for applications.
Alpana Killawala, RBI spokeswoman, couldn’t immediately be reached for comment.
India’s economy is forecast to grow 4.9 percent in the 12 months through March 31, compared with the decade-low 4.5 percent in the previous fiscal year, the Statistics Ministry said Feb. 7.
The Hindustan Times newspaper reported earlier today that IDFC Ltd. and India Post were favored for the bank permits.